Wiseco, Inc. v. Johnson Controls, Inc.

JCI (defendant) orally agreed with Wiseco (plaintiff) that Wiseco would manufacture headrest-stay parts for DaimlerChrysler vehicles, maintaining capacity for 4,000 parts daily over an understood four-year term. After six months of steady orders, JCI's orders dropped sharply once DaimlerChrysler redesigned its headrests to require a differently shaped part, which JCI then sourced from a Canadian company located near its final assembly plant. Wiseco sued for breach, and the trial court granted JCI summary judgment, finding the reduction was made in good faith.

Whether a reduction in orders under a requirements contract subject to UCC section 2-306(1) is made in good faith where engineering changes to the product are required and there are business efficiencies gained by using an alternate source to manufacture the new product.